Colombian court hands major win to South32, won’t have to pay damages

Cerro Matoso, in operations for more than 30 years, is one of the world's largest producers of ferronickel. (Image courtesy of South32.)

Colombia’s Constitutional Court has sided with Australia’s South32 (ASX, LON, JSE:S32), saving the company from paying $400 million in compensation for alleged damages to local communities caused by waste emissions from its Cerro Matoso nickel mine and smelter.

The final ruling, local paper La Razón reported, was based on independent medical examinations ordered by the court, which concluded there was not enough evidence to link community diseases to the product of the mine operation.

But the court upheld part of a previous ruling requiring the company to re-apply for its environmental licensing, after carrying a community consultation process.

South32 still has to re-apply for Cerro Matoso’s environmental licensing, after finishing community consultation.

In March, the same court had overturned a previous decision to deny compensation demanded by indigenous and Afro-Colombian communities claiming to have been affected by Cerro Matoso operations.

At the time, the judge accepted as valid evidence reports presented by leaders of eight communities and said that waste from the mine, located in northern Colombia, had led to locals being diagnosed with diseases including lung cancer, rheumatoid pneumoconiosis from breathing ashes, and high levels of nickel in their blood and urine.

It also told the company to apply for a new licence to operate the mine following a period of consultation with the local communities, during which South32 was told to come up with a range of measures to improve the environment and ecosystem around the mine complex.

Cerro Matoso, which has been running for more than 30 years, is one of the world's largest producers of ferronickel, accounting for about 4 percent of the total value of South 32's assets. Last year, it generated 40,600 tonnes of the metal.